Successful Financial Advisor-Client Relationships: Why Cultivating Genuine Relationships is Key

With the financial scandals and market volatility of recent years, developing and maintaining trusting relationships with clients is key for financial advisors, especially in a shifting advisory space.

There are a lot of potential investors looking to get financial advice from professionals. However, they may not only be overwhelmed by the ever-changing market, but also by the challenge of finding an advisor they can trust.

Knowing how to build a trusting relationship with clients is indispensable, especially where clients are trusting you to act as a guide in assisting them towards achieving their investment and financial goals. A reckless or inattentive financial advisor could result in outcomes varying from ineffective to catastrophic for the client, so it’s vital for an advisor to foster trusting relationships with clients.

Regardless of how reliable a financial advisor may be in delivering positive outcomes, this alone does not mean that an advisor will be able to retain or bring in new clients. Clients want someone who is transparent and ethical. Financial advisors should keep in mind that there are other facets outside of results that will help create trust between them and their clients. Although that approach is subjective to the particular advisor and client, here are some ways that you can improve your advisory approach towards creating more genuine relationships.

Build a foundation of trust: First of all, be clear about what kinds of advice and services you offer as well as your certifications and experience. You should also be upfront about what kind of fee structures and options you offer. This way a client can know whether they think you will be a good fit for their basic criteria.

Some other ways to develop and nurture your client relationships early on are to put your focus on educating clients, framing your advice with the clients’ goals in mind, and managing your time effectively. As an advisor, you should show that you value advising outside of the standard portfolio management. If a client can see that their advisor not only understands their unique goals and works with their specific portfolio, they will know that they are getting the best advisor-client experience.

Another way to build a trusting foundation is through clear and timely communication. Trust can be built or broken in small and obvious ways, and advisors should be mindful that clients can make quick judgments early. Communicating clearly what you intend to do, and then being sure to quickly reply to follow-up messages, is key. If an email or phone call early on is left unanswered, a client might conclude that an advisor has poor follow-through across the board.

Listen: Commit to listening more than talking. This way, a client will feel that you care about their goals and situation. Listening is a skill, and when you are an effective listener, you will be able to more successfully identify your clients’ concerns and goals. As a result, you can then tailor your advice to each unique client and their situation. Instead of putting all your attention on the market, focus more on your client and their goals. Not only will the client see that you care about their goals, but you may be able to see the market framed by the goals of your clients.

Why cultivating genuine relationships matter: Developing emotional trust between advisor and client is a compelling component in the relationship, and it’s something that has to be figured out subjectively in each relationship. Embrace a fiduciary, or kind of trustee, relationship. Take an interest in your clients’ goals. Show in tangible ways that you will act in their best interest. Develop a rapport. Communicate that you’re being proactive during periods of market volatility so that the client sees that you are doing all in your power to protect their investments and help them reach their financial goals. Be transparent, both in person and through digital means, and be clear about what you are doing. Don’t shy away from having difficult conversations when necessary.

If you can do these things to deepen trust and rapport, then the client will learn to trust you and not worry that you have their best interest in mind.

Key takeaways: Clients care about their relationships with their financial advisors, and how they perceive you is as significant as how successful your performance is. Earning the trust of clients and maintaining genuine advisor-client relations is a critical skill for financial advisors.

Reach out to me for more strategies on gaining your clients’ trust. As a successful multifamily investor and a top coach for financial advisors, I draw on values-based leadership to teach advisors how to build better relationships with their clients, network, and build a better mindset to help them grow their business.